In April, Europe produces two notable “big movers” to the upside as, overall, our top 5 countries show a significant shift with China and Korea moving out of the model to be replaced by Switzerland and Germany.
Notable Moves to the Upside:
- Switzerland… Moved up 7 spots from 12th to 5th overall. The Swiss showed improvements in all four factor groups, but the most significant change came from their momentum. They were the second best performing country during the first quarter up 14.2%.
- Germany… Moved up 6 spots from 9th to 3rd overall. The showed improvements in all four of the factor groups with the biggest jump coming in their risk ranking. After showing rapidly improving CDS, they are now the least risky country in the model.
Notable Movers to the Downside:
- Mexico… Fell 11 spots from 10th to 21st overall. They majority of their move came from deteriorating fundamentals as well as decelerating momentum. They showed a negative change in their OECD leading indicators and their medium term price momentum is well below average.
- Spain… Dropped by 6 spots and is now the worst ranked country in the model. All four of their factor groups showed signs of deterioration, but the biggest drop came from their valuation score. Spain’s trailing P/E is now 32.7 and they have the worst Earnings Yield at 3.1%.
The model is currently overweight risk factors by 2%, neutral valuation factors, and underweight momentum and fundamental factors by 1% each.
Feel free to leave comments and questions.